Back of the Envelope Business Model Test

Episode 294 | Back of the Envelope Business Model Test

Date: 2016-06-21

Link: Startups for the Rest of Us

 

Startups for the Rest of UsBook: Scaling Lean – Mastering the key metrics for startup growth

Look three years out and what expected revenue is going to be.

With a dollar amount of yearly recurring revenue (three years out) you have a number to base your other calculations on.

Looking three years out you’re going to be way off.

Use value-based pricing to base your price on. This is based on the value your solution provides not what it costs to deliver.

If you can provide value based pricing you are better off.

You’re trying to get down to average price per customer and average lifetime value.

If you can’t make your business model work on paper then you are never going to be able to make it work in real life.

Time-boxed goals are better than general revenue goals.